The Employees’ Provident Fund Organisation has retained the 8.25% interest rate on EPF deposits for the financial year 2025–26, marking the second consecutive year at the same level. The decision was approved at the 239th meeting of the Central Board of Trustees in New Delhi, chaired by Union Labour and Employment Minister Mansukh Mandaviya.
The proposal will now be sent to the Ministry of Finance for concurrence. Once ratified, the interest will be credited to the accounts of more than seven crore EPFO subscribers across the country.
The decision provides stability for salaried employees amid global economic uncertainties. Interest on EPF deposits is calculated monthly on the running balance but credited at the end of the financial year. However, accounts that remain inactive for 36 months are classified as dormant and do not earn interest.
Financial discipline and subscriber protection
According to the official statement, the EPFO has maintained strong financial discipline despite volatile global conditions. By retaining the EPFO 8.25% interest rate 2025-26, the organisation aims to ensure stable and competitive returns without placing undue strain on its interest reserves.
The Board also approved a one-time Amnesty Scheme to resolve compliance issues related to income tax–recognised trusts that are yet to be covered under or granted exemption under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. The scheme takes into account the provisions of the Finance Act, 2026.
The amnesty window will remain open for six months and is designed primarily to protect employees’ interests. It allows waivers of damages, interest, and penalties for establishments that have already provided benefits equal to or better than statutory norms. It also permits retrospective relaxation or exemption under defined conditions, ensuring eligible employees receive statutory benefits.
Officials expect the move to resolve more than 100 active litigation cases and several other disputes, benefiting thousands of trust members.
Simplified SOP and new social security framework
The Central Board of Trustees has also approved a simplified Standard Operating Procedure for EPF exemptions. The revised SOP consolidates four existing procedures and the Exemption Manual into a single comprehensive framework, reducing compliance burdens for employers.
The new system introduces an end-to-end digital process for surrendering exemptions and transferring past accumulations. This reform is expected to improve transparency, streamline audits, and enhance ease of doing business through technology-driven governance.
In addition, the Board cleared the notification of new social security schemes aligned with the Code on Social Security, 2020. The Employees’ Provident Fund Scheme, 2026; Employees’ Pension Scheme, 2026; and Employees’ Deposit Linked Insurance Scheme, 2026 will replace the existing frameworks. These schemes aim to provide a legally robust and modernised foundation for administering provident fund, pension, and insurance benefits.
By retaining the EPFO 8.25% interest rate 2025-26 and introducing structural reforms, the organisation has signalled continuity in returns along with long-term governance improvements. For millions of salaried employees, the announcement brings stability, while the broader reform measures seek to modernise India’s social security architecture.
